365 receivables turnover days of sles oustanding = costoF goods sold inventory turnover: 2 average inventory 365 days of inventory on hand = 36 _ inventory turnover purchaser average trade payables 365 payables tumover ratio payables uover ‘number of days of payables ‘otal ass turmover = ——T¥SRUE_ average coal assets fixed aser curnover: Sevens avenge net fixed asrets ‘cash + marketable securities + receivables average daily expenditures eye (‘2 sales ) days of inventory)|_ number of days orl =lutstanding}* [on hand of payables ©2014 Kepln, ne Page 327Book 3 — Financial Reporting and Analysis Formulas Solvency Ratios: total debe debe soaculey = dharehalderd equly depo cmp aaa ee coal debr + otal shareholder equity coral debe bash ‘total assets: average total assets financial leverage = STARS OT SSCS BE average toeal equity ‘earings before interest and taxes inceret payments __ earnings before interest and exes + lease payments fed charge covers ee incerese payments + lease payments Profitat net profit margin = "et income operating income |, _EBIT. ‘pertng pote margin = SPENCE gp EBT Pros margin = revenue return en assets (ROA) = Pt income _ CRON) age wal aes scrum en ase (ROA) = Met inCome + interes expense (I~ tx rate) average total asses ‘operating income ,, ___EBIT ‘Perating reurn on assets = _yerage total assets "average total assets EBIT ‘return on eotal capital - FIT __ average tol capital ‘averagerotal equity Page 328 (©2014 Keplan, IneBook 3 ~ Financial Reporting and Analysis Format nt income ~ preferred dividends return on common equity = average common equity _ net income available to common average common equity Free Cash Flow to the Firm: FCEF = net income + noncash charges + [interest expense x (1 ~ tax rate)] ~ fixed capital investment ~ working capital investment FCEF = cash flow from operations + [interes expense x (I ~ ex rate) ~ fixed capital Free Cash Flow to Equity: CFE = cash flow from operations — fixed capital investment + net borrowing, sales common-size balance sheet ratios = Palance sheet account otal asets cath flow eeatmnont account common-size cash Hlow ratios = connie wnat = fo extended DuPont equation: EBIT seria (ome noe =(8e02 EBT net income ~ preferred dividends “weighted average number of common shares outstanding basic EPS = (convertible debe preferred dividends ‘hates From conversion of | + convertible 5 0-9) shares fom shares issuable from stock options} J+] conversion af | + (conv. pf. shares) | conv. debe (©2014 Kaplan, Ine Page 329Book 3 — Financial Reporting and Analysis Formulas Coefficients of Variat standard deviation of sles val a ‘mean sales standard deviation of operating income CV opesating income = Sane CV netincome — sda deviation of net income Inventories: ending inventory = beginning inventory + purchases ~ COGS Long,Lived Asset covt—eslrage lon seraighline depreciation = === DDB depreciation = lez 7 al (cose accumulated depreciation) sgn cot —whrge vale : ent pn inn — HE Oy unc ped Deferred Taxes: income tax expense = taxes payable + ADTL- ADTA Dela Liabilities: the matkee rate interestexpense of the ibilgy at the balance sheet value the beginning of the period, Page 330 (©2014 Keplan, IneBook 3 ~ Financial Reporting and Analysis Performance Ratios: cash floweo-revenue = FO cro cash reurn-on-asets = ——CFO___ menge ond anes cro ‘ath rerun-on-equity = CO average coral equity cro. ‘cash-tocincome = ——CO_ ‘operating income ee uae (CEO ~ preferred dividends ‘weighted average number of common shares Coverage Ratios: cro brat C 9 reinvestment = ——__F0_ ~ Gath paid fr longcerm asses cro debe payment = 5 Toagrem debt payment ___¢ro Eden pamen = ad CEO investing and financing =———______CFO | ‘5 Cash outflows from investing and financing activities (©2014 Kaplan, Ine Format Page 331